US, WASHINGTON (NEWS OBSERVATORY) — Head of Markets at JP Morgan International, David Stubbs, in an interview with Mirror of the Week, warned of an imminent series of sovereign defaults. Lebanon was the first in the list of countries that recently defaulted.
Lebanese Prime Minister Hassan Diab asked creditors to restructure debt on Eurobonds.
According to the expert, a relatively low penalty for refusal to fulfill obligations, as well as the fact that non-payment of debt becomes a problem of the creditor rather than the debtor, can push a default to several unnamed countries. In addition, in a couple of years, the former bankrupt may again enter the loan markets.
“If the economy was on the verge of default, even if the thought of it appeared, it is obvious that this economy is already in stress,” Stubbs said.
The economist said that the need to seek funds to pay off bonds makes crisis governments take unpopular steps in domestic politics.
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